At the time this article was
written Alan MacEachen was Opposition Leader in the Senate.

On July 6, 1988, the Senate
informed the House of Commons, that it had divided into two parts Bill C-103
(An Act to increase opportunities for economic development in Atlantic Canada).
The Senate passed the first part without amendment, and retained the second
part for further consideration. The government, however, declined to deal with
the bill in its new divided form. A government motion was passed by the House
of Commons and a message sent to the Senate, stating that the splitting of Bill
C-103 was viewed as an infringement of the privileges of the House of Commons.
In the Autumn, 1988, issue we published the rulings of Senate Speaker
Charbonneau and House of Commons Speaker Fraser with regard to the splitting of
Bill C-103. The issue of resolving disputes between the Houses is likely to be
an ongoing one during the present Parliament so we are now reprinting a
slightly edited version of Senator Allan MacEachen's remarks of July 26, 1988,
analyzing the procedural and constitutional implications of what transpired.

In my opinion the message from the
House of Commons cannot be accepted as a serious effort by the government to
deal with the issues raised by Bill C-103. It can be questioned from two
angles: first, the assertion that "grants of aid and supplies" are
set out in Bill C-103; second, the assertion the Senate has "altered the
ends, purposes, considerations, conditions, limitations and
qualifications" of the yet to be identified "grants of aid and
supplies". What we have are assertions and assertions alone -- no proof,
no identification of the relevant clauses of Bill C-103.

The alleged Senate misdemeanours
have all been committed "contrary to Standing Order 87" we are
advised by the Minister of State (Treasury Board), the author of the message. I
shall return to this point in some detail later, but it should be obvious to
all that the Standing rders of the House of Commons do not establish the powers
of the Senate. The latter come from the Constitution and cannot be added to, or
subtracted from, by the Standing Orders of the House of Commons.

It cannot be emphasized too
strongly that the message introduced in the House of Commons by the government,
and passed, is not based on the ruling of the Speaker of the House of Commons,
which was given three days after the message of Mr. Lewis was put on the notice
paper. In fact, the Speaker of the House of Commons did not pronounce on the
question raised in the message of the government, namely, the financial
privileges of the respective houses.

I quote from Mr. Speaker Fraser's
ruling:

"The Speaker of the House of
Commons by tradition does not rule on Constitutional matters. It is not for me
to decide whether the Senate has the Constitutional power to do what it has
done with Bill C-103",

I should note that the Speaker of
the Senate in his ruling of June 7, 1988, did pronounce on the matter, and
found that splitting Bill C-103 in the Senate "would be in contravention
of Section 53 of the Constitution Act, 1867".

Mr. Speaker Fraser did find a
breach of privilege in that the Senate message did not seek the concurrence of
the House of Commons in dividing Bill C-103.

Senator Flynn with the concurrence
of all of us, deleted the request for the agreement of the House of Commons
which was contained in our original message. I do not think any of us can fail
to accept our responsibility jointly for removing the request for concurrence
which had been in the message to the House of Commons as originally read by our
Speaker.

It is worth quoting two paragraphs
from Mr. Speaker Fraser's comments because two important conclusions flow from
them:

A Canadian precedent does exist for
a consolidation of two Commons Bills into a single legislative measure by the
Senate. That took place on June 11, 1941, with a message from their Honours,
from the Senate, asking for the concurrence of tis House. The Commons agreed
with the Senate proposal, that is, a proposal to take two Bills from this place
and put then into one Bill. The Commons agreed with the Senate proposal waiving
its traditional privilege, and a single Bill was eventually given Royal Assent.
I underline that that was the act of this House in waiving its tradition of
privilege and accepting the invitation of the Senate to put Two Bills together.

If it is admitted that the Senate
can consolidate two Bills, why then can it not divide one Bill into two or more
legislative measures? The answer is at least in part in the message. In the
1941 case just alluded to the Senate specifically sought the concurrence of the
House for its action. Apparently it was the disposition of this place to accept
it. In the message received last Friday relating to Bill C-103, the Senate does
not seek the Commons' concurrence in the division of the Bill, it simply
informs this House that it has done so, and returns half of a Bill.

So we did sin in not seeking the
concurrence of the House of Commons but I would call that a venial sin. It
seems to me, as I said earlier, two conclusions flow from Mr. Speaker Fraser's
ruling which are of interest to us in examining the fall-out, procedurally and
constitutionally, from a motion to divide a bill.

The first conclusion is that in the
future the Senate need not be inhibited on those rare occasions where
circumstances justify its dividing a Commons bill, provided the proper request
for concurrence is made.

The second conclusion that I draw
is that the precedent of 1941, cited by the Speaker, whereby the Senate
consolidated two House of Commons bills into one, did not encounter the
objection that the consolidated bill had originated in the Senate, as was
contained in the ruling of our Speaker in the case of dividing Bill C-103 into
two bills.

Of course, in my view, that same
reasoning should apply in both cases. In fact, the consolidated bill -- which
was not regarded as having originated in the Senate siply because it had been
united in the Senate -- was clearly a money bill, and that is a helpful
illumination of procedure in the Canadian Senate.

The Royal Recommendation

Before dealing more specifically
with these issues, I wish to refer to the tendency to accept, as it were,
blindly by an act of faith, that once a financial recommendation of Her
Excellency is attached to a bill, such attachment automatically transforms the
bill into a money bill, regardless of its contents. The attachment of a
financial recommendation to a bill is not in fact conclusive proof that it is a
money bill. The test must be whether it is a bill for the appropriation of any
part of the public revenue. If it meets that test, it is an appropriation bill
and, accordingly, must, in conformity with section 54 of the Constitution Act,
1867, be recommended by Her Excellency. But this test of content has not been
applied. The reverse test has been applied to Bill C-103.

Let me give two examples of the
performance of this act of faith in reference to Bill C-103. Mr. Speaker Fraser
said:

"There is a requisite that in
a Bill that is going to call upon the expenditure of funds, a financial
recommendation of Her Excellency the Governor General is necessary. So this
Bill is in a very real sense a financial Bill."

Mr. Speaker Charbonneau said:

Bill C-103 "is a government
bill and a money bill, having been recommended by Her Excellency the Governor
General."

The assumption is that because it
bears a royal recommendation it is, therefore, a money bill. That is not an
entirely satisfactory approach. If it were possible simply to produce a royal
recommendation and, therefore, create a money bill, one would not even have to
look at the contents of the bill. The contents of the bill dictate whether it
is an appropriation bill. If it is an appropriation bill, then a royal
recommendation is necessary -- not the reverse.

The reasoning in this case has been
to say, "Here is a royal ecommendation; therefore, it is a money
bill." Has anyone stopped to consider who affixes the royal
recommendation? Who makes the judgment and what criteria are applied in
deciding that a royal recommendation is to be affixed? Are the criteria
generally understood or generally accepted? This is certainly not a public
process. It is a very obscure decision-making process, conducted privately.

I think we are entitled to have
reasons, rather than to accept on faith, why Bill C-103 is an appropriation
bill.

The situation becomes less clear if
one puts side by side the ruling of Mr. Speaker Fraser and the ruling of Mr.
Speaker Charbonneau. Mr. Speaker Fraser refused to make a constitutional
judgment while Mr. Speaker Charbonneau did make such a judgment in the words I
have read. Mr. Speaker Fraser did not say whether the financial privileges of
the House of Commons had been breached, because such a conclusion would be a
constitutional judgment, which, in his opinion, is not customary for the
Speaker of the House of Commons to make. Mr. Speaker Charbonneau did rule, by
implication, if not directly, that the motion made to divide the bill breached
the financial privileges of the House of Commons -- a finding the Speaker of the
House of Commons did not wish to come to.

In its simplest form, the question
comes down to this: Is Bill C-103 an appropriation bill? If it is, the further
question must be addressed: Does this fact render it immune from modification
by the Senate? That is the import of the message which we have received from
the House of Commons.

I have already argued that the
presence of a royal recommendation does not necessarily a money bill make. It
is not conclusive proof that it is a money bill.

There is another point that must be
made. Bill C-103 does not provide general funding for the Atlantic Canada
Opportunities Agency. That funding is provided for in the Estimates. Even
Donald McPhail, the president of ACOA,testified in the National Finance
Committee that there were no dollars for the agency in Bill C-103.

When one examines Bill C-103, one
finds the following provisions that deal with the payment of moneys:

Clause 5(4): "reasonable
travel and living expenses" for the members of the advisory boards that
"may" be established. The advisory boards have been established and,
presumably, the expenses of their members are being paid by funds provided
through the Estimates.

Clause 11(4): renumeration for the
President of ACOA. He is being paid now " he told us so " by funds
provided for in the Estimates.

Clause 18(7): renumeration and
expenses for the members of the Atlantic Canada Opportunities Agency Board.

Clause 31(1): a salary for the
vice-president and fees for the board of directors of Enterprise Cape Breton
Corporation.

Clause 31(2): travel and living
expenses for ECBC directors.

Clause 32(2): salaries for the
employees of ECBC.

There is, of course, clause 57,
which, under the Salaries Act, provides for the remuneration of the minister
responsible.

In this bill we have authorization
for salaries, remuneration and expenses of the president, vice-president,
employees, directors, and the minister. Apparently, for this reason, the bill
was introduced with a royal recommendation. In consequence, His Honour the Speaker
in the other place, referred to the bill as a "money bill", or a
"financial bill." If this is a money bill, it is only because the
loosest definition has been applied to the term, because the bill does not
appropriate a single dollar of the public revenue.

If one were to accept, upon proof,
that Bill C-103 is an appropriation bill, how have we, as I have already asked,
"altered the ends, purposes, considerations, conditions, limitations and
qualifications of the grants of aid and supplies" by dividing the bill.

We passed, without change, Part I
of the bill and held over Part II for further cnsideration. As far as ACOA is
concerned, the minister, president, advisory board members and ACOA directors
will still get all their money. They will get it, of course, provided that
Parliament has already supplied money to the Crown, or in the future supplies
money for this purpose. We have not added any conditions, limitations or
qualifications, and yet, that is exactly what the message accuses us of doing.
The Secretary of State (Treasury Board) claims that these conditions and
limitations relate to "the grants of aid and supplies set out in the
bill..." Are we now to learn that, in addition to being a money bill and a
financial bill, Bill C-103 is also a supply bill?

The Recommendation contained in the
first reading copy of Bill C-103 states:

"Her Excellency the Governor
General recommends to the House of Commons the appropriation of public revenue
under the circumstances, in the manner and for the purposes set out..."

We have not changed the
circumstances, the manner or the purposes. That is a fact.

The message from the House of
Commons, in the name of the Minister of State (Treasury Board), was not based
on any fact. It was not backed up in the speech made by the minister in the
House of Commons. The minister did not disclose which clauses of the bill
contained the grants in aid and supplies, nor did he describe how they had been
altered by the Senate.

British Practice

At this point, it might be useful
to take a look at British parliamentary law and practice on money bills,
although it cannot be taken as a complete guide for the Parliament of Canada
because of two important reasons.

First, in 1867 it was understood
that the new Dominion was to be a federal union and that one of the chief tasks
of the Senate was to protect the smaller provinces against both unfair taxation
and unfair spending by a government with a large majority in the House of
Commons.

Second, in 1911 the United Kingdom
Parliament introduced a suspensive veto for both money bils and other bills.
This was to reduce the power of the peerage. The provisions of that act do not
apply to Canada.

The constitutional powers of the
House of Lords are not as great as those of the Senate of Canada. Nevertheless,
we would find it highly instructive to examine British law and practice
governing what are called "money bills," because what is now being
claimed by the Canadian House of Commons goes far beyond what is claimed by the
British House of Commons.

British parliamentarians use the
term "money bills" in two ways: (a) for the purposes of the
Parliament Act, and (b) in making historic claims of privilege relating to what
are called "aids and supplies".

Let us look at the definition of a
"money bill" for the purposes of the Parliament Act.

According to Erskine May's summary,
the Parliament Act defines a money bill as a public bill which contains only
provisions dealing with taxation, appropriation, loans and subordinate matters
incidental to those subjects. Notice especially the words, "only
provisions dealing with taxation, appropriation and loans"!

Using that definition, is Bill
C-103 a money bill? Clearly, it does not deal with taxation. Does it, for any
purpose, impose charges on the Consolidated Revenue Fund or on any money
provided by Parliament? If so, does it deal only with such matters? The answer
to all of these questions is "no". The Speaker of the British House
of Commons would have had no difficulty in coming to the conclusion that Bill
C-103 is not a money bill.

We now come to the restrictions on
the House of Lords with regard to money bills arising from the privileges of
the House of Commons respecting aids and supplies. This refers to bills that
tax and bills that appropriate revenue from the Consolidated Revenue Fund.

The British Commons claims that the
House of Lords may not introduce or amend such bills. However, aids and
supplies money bills must not contain provisions for other purposes. Erskine
May, seventeenth edition,at page 836, states:

"In former times, the Commons
abused their right to grant supplies without interference from the Lords, by
tacking to supply bills provisions which, in a bill that the Lords had no right
to amend, must either have been accepted by them unconsidered, or have caused
the rejection of a measure necessary for the public service. This practice
infringed the privileges of the Lords, no less than their interference in
matters of supply infringes the privileges of the Commons; it has been met by
the Lords by standing order No. 45, embodying a resolution:

The annexing of any clause or
clauses to a bill of aid or supply, the matter of which is foreign to and
different from the matter of the said bill of aid or supply, is
unparliamentary, and tends to the destruction of constitutional
government."

Erskine May then goes on to say:

"On no recent occasion have
clauses been irregularly tacked to bills of supply." --

Conclusion

I conclude therefore, that Bill
C-103 is not a taxation bill; neither is it an appropriation bill. However, if
it were -- if it did grant aid or supply, as claimed by the message of the
House of Commons, it is a bill in respect of which the Commons cannot claim
privilege, because the bill contains provisions which neither tax nor
appropriate.

As I mentioned earlier, the
Minister of State in his message claims that the Senate has contravened
Standing Order 87 of the House of Commons.

In his ruling of July 11, 1988, Mr.
Speaker Fraser properly emphasized the importance the House attaches to its
Standing Order 87. This Standing Order reads:

"All aids and supplies granted
to the sovereign by the Parliament of Canada are the sole gift of the House of
Commons, and all bills for granting such aids and supplies ought to begin with
the House, as it is the undoubted right of the House to direct, limit, and
appoint in all such bills, the ends, purposes, considerations, conditions,
limitations and ualifications of such grants, which are not alterable by the
Senate."

The Senate has never, to my
knowledge, accepted this particular assertion of privilege by the House of
Commons. In his comments the Speaker of the House of Commons cited Standing
Order 87 as authority for the proposition that "the Senate is somewhat
limited in its review of money bills." It is indeed true that we are
somewhat limited in our treatment of such bills, but so is the House of Commons
limited. The question is: Where are the limits on the Senate? The Senate has
never claimed that it could increase the amount to be given to the Crown for
any specified purpose by an appropriation bill, but this does not mean that it
has ever concurred in Standing Order 87.

I could refer to a number of
Canadian authorities on this point, but I will confine myself to a quotation
from the 1987 edition of "The Government of Canada", by R.M. Dawson
and Norman Ward, on the question of Standing Order 87, which has been referred
to as the guiding principle in the message we have received from the House of
Commons. The authors, who are well known and authoritative -- and probably
without any strong bias in favour of the Senate -- state as follows:

"It is a fair statement that
almost the only attention the Senate has given to this grand assertion is to
ignore it. On the theoretical side the Senate has argued that if the
constitution was intended to limit the Senate's power over money bills once
initiated, it would say so. The Senate has insisted further that it could not
discharge its functions as a guardian of provincial or regional rights if it had
no power over money bills. What is more important is that the Senate has
repeatedly amended bills that contained money clauses, and also bills that
dealt exclusively with finance, including income tax bills. The Commons has
accepted Senate amendments to money bills, usually adding a futile claim that
its acquiescence must not be considered a precedent. The Senate could, if
ractice is any guide, amend a money bill out of all recognition, so that in
effect the bill was rejected." (p. 165)

In 1918, a Special Senate Committee
was appointed to determine "The Rights of the Senate in Matters of
Financial Legislation". In that same year it presented its report, known
as the Ross Report, after its Chairman, Senator W.B. Ross. This committee
concluded, and I quote:

"That the Senate of Canada has
and always had since it was created, the power to amend Bills originating in
the Commons appropriating any part of the revenue or imposing a tax by reducing
the amounts therein, but has not the right to increase the same without the
consent of the Crown."

That is the conclusion of the
Senate committee on the financial privileges of the Senate, which is supported
by contemporary authors -- all contrary to the message we have received from
the House of Commons.

The same Ross report goes on to
explain:

"That Rule 78 [now #87] of the
House of Commons of Canada claiming for that body powers and privileges in
connection with Money Bills identical with those of the Imperial House of
Commons is unwarranted under the provisions of the British North America
Act."

The report then goes on to say:

"The House of Commons cannot
by passing Rules add to its powers or diminish those of the Senate. Rule 78 of
the House of Commons is quite outside of the powers of that House."

It is therefore not a new issue we
are faced with. The question is whether we will be as resolute in asserting the
privileges of the Senate as were our predecessors in earlier years.

So though, in the words of the
Speaker of the other place, the House of Commons "has always considered
Standing Order 87... as setting out the special relationship between the...
House of Commons, and the Sovereign," the inescapable fact of the matter
is that the Senate consistently rejected this unilateral declaration. Consequently,
as matter of principle, and as a member of this chamber interested in
maintaining the privileges of the chamber, I cannot find favour with that part
of the message from the House of Commons declaring:

"The Senate has altered the
ends, purposes, considerations, conditions, limitations and qualifications of
the grants of aid and supplies set out in the Bill, contrary to Standing Order
87..."

If we agreed to this portion of the
message, we would appear to be recognizing the paramountcy of Standing Order 87
even over the Constitution of Canada.

I applaud the Speaker and members
of the House of Commons for asserting whatever privileges they think they can
assert. However I cannot agree to the imposition of their perceived privileges
on to the members of this chamber. They cannot, by a House of Commons motion,
strip the Senate of its constitutional right to participate fully in the
legislative process. The Senate has never accepted this motion; it has never
accepted any limitations beyond those already mentioned.

When concluding his remarks on our
message to the House of Commons, Mr. Speaker Fraser placed great emphasis on
the privileges of that chamber:

"As Speaker of the House of
Commons of Canada I must uphold the privileges of this place at all times, and
I must also advocate them privately, publicly, and with vigour."

I say "amen" to that; let
them uphold their privileges, but who is to uphold the privileges of the
Senate? Who is to advocate at all times, privately, publicly and with vigour,
the privileges of the Senate? The senators, I hope. I hope all Senators will
join in supporting the traditional privileges and purposes of the Senate, and
not for a momentary consideration, accept the conclusions that are contained in
the motion from the House of Commons.

This is obviously a very important
matter, because there have been procedural and constitutional issues flowing
from the act we took in dividing the bill. The issues that have been raised
give us an opportunty of addressing some of the fundamental aspects of the
relationship between the House of Commons and the Senate at a time when the
Senate is exhibiting new vigour in the legislative process.